NIGERIA: Grain merchants price gouging, some officials say

Photo: Nicholas Reader/IRIN

Traders at the Dawanau market in Kano, West Africa's largest food market, in March 2007

KANO, 12 November 2007 (IRIN) - With little information on this year’s harvest in northern Nigeria available market traders are using rumours of imminent food shortages to push prices beyond most people’s reach.

Traders at the Dawanau market in Kano, the largest food market in West Africa, told IRIN that over the last two months they have raised prices for a sack of maize – the most common staple food in the region – from US$20 to $31, a bag of millet from $19 to $28, and cowpeas to from $39 to $54. Rice has risen to $78 from $63.

Northern Nigeria includes many of the poorest provinces in the country and news of the cuts is causing worries among ordinary people who are struggling to buy food to eat.

“The prices are outrageous, my family is spending an extra 6,500 naira ($50) on food items and there is no indication that the prices will drop, it is always getting worse,” said Hajara Kabir, a mother of seven who was in the market to buy a bag of maize for her family.

Traditional chiefs in the region have already appealed to the Nigerian government to use its strategic food reserve to offset the market.

In October, the influential traditional chief of Kano, Ado Bayero, made the first call for assistance during his annual message. Last week another traditional chief Muhammad Sani, in neighbouring Jigawa state, made a similar appeal when he paid a courtesy visit to the state governor, Sule Lamido.

In northern Nigeria rain usually falls for four months, between May and August, but this year rain fell for less than three months from July until early September. In some localities local officials reported that locusts destroyed crops.

However Kano’s agriculture commissioner, Musa Suleiman Shanono, has accused traders of manipulating a lack of precise information about the harvests to increase their profits.

“It is still too early to conclude that there is going to be food shortages despite the twin problems of short rainy season and the locusts,” he said. “Some grains merchants have turned into speculators, spreading fears of possible food shortages as a ploy to control pricing of commodities. This is why they hoard grains which makes them scarce. It is just a demand and supply strategy.”

“We are waiting for the report of our experts we sent to all parts of the state to assess the impact of the rain shortage and the locusts on farm yield before we can come up with an informed analysis of the situation,” he added.

Muhammad Abdullahi Koya, head of the grain merchants association in Dawanau market, defended the traders’ decision to hoard their stocks. “The food situation this season is alarming and there is growing fear of food shortages due to the fact that farmers have recorded poor yields as a result of a short rainy season and the destruction of crops by locusts.”

“This fear has made grain dealers withhold their commodities from the market, waiting to assess the food situation when all crops will have been harvested so as to know how to fix the prices of their commodities to make some gains,” Koya said.

Henri Josserand, head of the Food and Agriculture Organisation’s (FAO) early warning unit, said more analysis is needed.

“There are reports of crop failures, some of which appear inflated, of high prices in northern Nigeria, and of people from neighbouring countries coming to buy cereals on the Nigeria market. We are not sure what to make of that yet – it’s a big unknown in the region and a lot of people are worried.”

“If there is a problem in northern Nigeria it is going to be sizeable but not a nationwide failure,” he cautioned. “The country is very productive but we have been getting some reports of problems in northern areas, although sometimes these are exaggerated by local authorities.”

In the worst-case scenario of low production in Nigeria, the country could turn to imports from outside the region, Josserand said, which would mean the problem would affect only Nigeria. If northern Nigeria’s authorities turn to neighbouring countries for supplies, that will mean price rises across the region.

“If there is indeed less production than expected it will have an impact on the region but depending how Nigeria handles it as a national policy will make a big difference,” he added.

The grain merchants association’s Koya said the shortage of grains in Dawanau will not affect just northern Nigeria but will have a ripple effect on countries in West Africa including Niger, Ghana, Togo, Benin, Cameroon, Mali and Central African Republic, whose merchants all buy grains from the market.

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